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Is Right Now a Good Time to Buy a Home?

Here are three things to consider if you’re thinking about buying a home.

Is right now a good time to buy a home? There’s a lot of emotion wrapped up in this question, but I always like to look at the facts, break them down, and use them to make an informed decision. Here are some things to consider if you’ve been waffling over this question:

1. Your exit strategy. If you’re looking to buy a house soon, what’s your exit strategy? If you have no foreseeable plans to move out of that home for the next several years, your plan matters. Markets cycle up and down, so even if you did buy now and the market were to correct, it will still come back up, meaning you’re not forced to sell at a certain time. That way, you can sell when the market cycles up. Right now, we are on one of those up-cycles, but because of several other factors, that doesn’t mean you should be afraid to buy.

2. The local market conditions. Right now, the U.S. unemployment rate hovers around 8%. Conversely, the unemployment rate in Maricopa County is only 5.9%, which is much healthier than the national average. Here, there’s job growth, corporate tax cuts, and a lot of big companies coming into the area. More than just your county, you also need to look at what’s going on in your specific city and perhaps neighborhood. It could be that the house you’re selling has a lot of demand with very little supply, causing you to max out your purchase price, but the one you’re looking to buy doesn’t have as much demand with a decent amount of supply, meaning you can get a good deal.

“I always like to look at the facts, break them down, and use them to make an informed decision.”

3. The affordability index. Right now, the index says that across the country homeowners had equity appreciation of 6.6% in the second quarter alone. Granted, it went down when COVID hit, but it bounced right back up. Again, be sure to look at your local market. Year over year in Arizona, we have an appreciation rate of about 16%, which is amazing.

Without question, now is a good time to sell across the board. If you’re looking to buy, it’s still a reasonably good time. Given the local economic conditions, that’s probably not going to change any time soon. Soon, snowbirds will begin traveling down here to purchase, and the weather will be perfect.

If you have any other questions about buying homes or other real estate topics, please reach out to me. I’d love to hear from you.

Case Study: Scottsdale Short Sale

Scenario

The owner of this Scottsdale home had two liens against the property. In order to prevent her going into foreclosure, we had to get the two lien holders to agree to this short sale. What happened in this case, was VERY RARE. Through consistent communication, negotiation and diligence with the two lien holders and buyer’s agent, we were able to get the first lien holder to agree to a buyer’s contribution to the SECOND lien holder, in the amount of $49,950…and we were able to negotiate the buyer to pay for the $49,950 on behalf of the seller to make the deal happen!!! It is EXTREMLY RARE that the first lien holder allowed this to transpire, but our contacts, reputation, and persistence helped get this done. We were able to relieve our seller from having to contribute any amount of money from her pocket to get this done!

  1. First Loan had a balance of $916,907
  2. Second Loan had a balance of $335,000

Outcome

Please see the bellow SHORT SALE APPROVAL LETTERS proving the details of our successful negotiations on this short sale. We were able to get full debt relief for our client (seller) protecting him from ever being pursued for the difference the banks settled on. Because the loan balance was so high, the second lien holder did require a contribution from the seller. However, we were able to negotiate the buyer contributing this balance and were able to get the first lien holder to approve this!

Recap

Our client, the seller was able to walk away from $1,251,907 of mortgage debt! And… with no fees paid for out of her pocket either! I know it sounds too good to be true but it’s not, we can do this for you as well. All because she decided to pick up the phone and contact Kelly Cook and the Kelly Cook Real Estate Group. We have many other examples just like this we would love to share with you as well. We truly are short sale specialists working the entire Greater Phoenix, AZ area and would love to speak with you today about your current situation and how we can help! Call today!

How Are We Celebrating Our Clients This Year AND Giving Back to Our Local Community?

Instead of our typical client event, we’re hosting something a little different.

Normally, our client events and parties are a simple way to give back and say thanks to all of you. We always cherish the time we get to spend with all of you in person, but because of COVID, it’s been a little difficult to plan one for this year.

So we came up with the idea for a giveaway, and it’s very easy to enter. All you have to do is pick up the phone on Wednesday, October 21, and give us a call at 888-KCRG-11 (888-527-3411) between 9 a.m. and 5 p.m. You’ll be automatically entered into our drawing for the chance to win the Green Egg Mini Max mobile smoker. It’s portable, great for tailgating or parties, and it makes delicious food.

With the holidays around the corner, we also want to give back to the local community. For each and every call we receive during the event, I will personally donate $5 to the St. Mary’s Food Bank on your behalf. The more people who call and enter, the more we're helping the community and the better chance you have of winning the prize.

Want multiple entries? All you need to do is head to our Facebook page and “like” it for a second entry. If you take it a step further and share our post to your personal Facebook page, you get a third entry. If you refer us to someone who is looking to buy or sell a home right now, you’ll get yet another entry. Each referral after that will result in an additional entry.

"The more people who call and enter, the more we're helping the community."

On October 22, we’ll do the drawing and announce the winner, so stay tuned for that. If you have questions for us about the giveaway or anything else related to real estate, don’t hesitate to reach out via phone or email. We look forward to hearing from you.

Which Closing Costs Must Arizona Buyers Pay?

These are the closing costs for which all Arizona buyers should prepare.

Which closing costs are you responsible for when purchasing property in Arizona? There are a lot of misconceptions about this topic, so today I’ll list the four costs you should prepare for and explain how each varies depending on your situation. Cited below for your convenience are timestamps that will direct you to various points in the video. Feel free to watch it in its entirety, or use these timestamps to browse specific points at your leisure: 0:53—Inspection fees 1:41—Appraisal fee 2:23—Lender fees 3:37—Title fees 5:03—How your down payment differs from the closing costs 5:41—How closing costs can be negotiated 6:24—Wrapping things up As always, if you have questions about this or any real estate topic or are thinking of buying or selling a home soon, don’t hesitate to reach out to me. I’m happy to help.

What’s the Latest News From the Federal and State Economy?

Here’s an update on the economy from the federal level down to the state level.

Most of the benefits of the $2.2 trillion stimulus package that Congress passed earlier this year in response to COVID have now expired. Congress is now adjourned and they’re potentially going to negotiate a new package, but in the meantime, four executive orders were recently signed that you should be aware of. Here is what they entail and how they’ll affect you:

1. Unemployment benefits. Unemployment benefits went from $600 a week down to zero as the funds expired. Now they may go back up to $400 a week based on what state you live in until something more concrete is passed by Congress.

2. Evictions. There is a moratorium on evictions in some states based on certain metrics that you would have to check with the HHS Department and the CDC to learn more about.

3. Postponed student loans. The delay in payments was set to go through September 30, but a three-month extension has been authorized. So if you have student loan debt, your first payment won’t be due until January 2021.

4. Payroll taxes. If you make less than $104,000 per year, you’re eligible to suspend or defer payroll tax on your paycheck through sometime next year.

According to the Mortgage Bankers Association, 3.8 million homeowners in America are currently in mortgage forbearance. The numbers here in Arizona have begun to plateau, but on a national level, that is a huge number. If you know of anyone who has been furloughed or is otherwise experiencing financial difficulties and would like to know what their options are, we’d be happy to help.

"The Arizona market will likely continue to be one of the strongest housing markets in the country."

There is some good news on the state level, however. The market is on fire right now; supply is very low and demand is sky-high thanks to people moving here from states like California. Here are some of the stats from our Arizona market:

1. Appreciation. The annual appreciation for 2020 is 12.8%, which is huge when you compare it to 2005, when the market went up extremely fast—the annual appreciation then was 26% (before the market came crashing down).

2. Affordability. If you’re a family making the median income in Arizona ($72,300), you should be able to afford about 60% to 75% of what is still selling in our market today.

3. ,Monthly payments. For the average homeowner in 2020, the average monthly payment is 30% lower than it was in July of 2006.

All in all, affordability is very good right now. We don’t currently have much of a bubble, but we’re not sure how long these trends can continue. At any rate, the Arizona market is very strong at the moment. I would argue that because of our increase in demand from the population influx and job growth, we’ll likely continue to be one of the strongest housing markets in the country.

If you have any questions about the market or need assistance with buying or selling a home, don’t hesitate to reach out to us. We’re here to help you.


What Do You Need to Know to Navigate the 2020 Market?

Here’s what you need to know to navigate the 2020 Phoenix market.

Looking to buy a home? Click here.
Looking to sell your home? Click here.

If you want to successfully navigate the 2020 Phoenix real estate market, there are three key points to remember:

1. July and August, traditionally the two slowest months of the year, are anything but.

In the wake of the COVID-19 pandemic, 2020 has been anything but a normal market. The pent-up demand from March, April, and some of May has come to roost in June and July. Right now, we’re seeing multiple-offer situations for homes across all price segments. If you’re a buyer, hire an agent who knows how to win out in multiple-offer situations, is familiar with different segments of the market, and has good relationships with other agents in the area.

2. As the old saying goes: Don’t wait to buy real estate—buy real estate and wait.

The average price point in Maricopa County is up to an astonishing $350,000, a significant increase over the past several years. This means if you were to purchase a house now for $300,000 at an interest rate of 4%, you’d build up about $32,000 worth of equity by 2025 (and have a loan balance of around $268,000).

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At the end of the day, the affordability index is quite low in the Phoenix area.

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Conversely, if you were to rent a house at that same price point, you’d pay roughly $2,000 per month. In that scenario, assuming you’d be living the same lifestyle, you’d end up paying $120,000 in rent after five years. In the first instance, you’d be putting $32,000 toward your net worth. In the second, you’d be squandering $120,000. In short, homeownership is a huge advantage.

3. Interest rates are very low.

In July of 2019, the average interest rate for a 30-year mortgage hovered around 3.8%. Right now, it’s down to 3.2%. Although rates will probably creep back up eventually, they’re low now and even more advantageous than last year, and last year was a very good market for both buying and selling.

At the end of the day, the affordability index is quite low in the Phoenix area. We have great job sector growth, low property taxes, and our price points are relatively low given all of the amenities Phoenix offers.

If you have more questions about our Phoenix area market or are thinking of buying or selling soon, feel free to call or email me anytime. I’d love to speak with you.